If you have poor credit, is it still possible to get a new car lease?

How does bad credit car leasing and rental agreement work?

Many car dealership companies will have leasing operations that are geared toward not only people with good credit, but also those with poor credit scores. They recognize, of course, that many of the latter have been affected by recent economic uncertainties.

Instead of wasting time applying for auto loans that have little chance of being approved, car leasing companies offer people with bad credit car leasing and rental services that are mutually beneficial. For tenants, they benefit from the following:

• Minimum initial payment
• Lower monthly payments
• Fast processing
• A new car at the end of each contract

The down payment on car leases is minimal. Some companies that only deal with leasing services actually only require payment of the lease in advance, which could make a big difference in the renter’s finances.

Monthly payments on a rental car are typically lower than payments on an auto loan, although you can significantly reduce the amount of monthly repayments on a vehicle loan by putting down a substantial amount toward a down payment. Industry estimates put the difference between monthly payments on auto loans and leases at between 35% and 40%, with vehicle leases enjoying the advantage.

Personal car lease bad credit application processing is faster than bad credit car loan applications. But in many cases, this is probably not true. The loan officer will probably just skim through the vehicle loan application and place it in the disapproved bin.

With auto loans, driving a new car from time to time just isn’t possible unless you go through a trade-in. With the rentals, you can purchase a new vehicle once the term has expired if you prefer a model with better features.
However, there are certain disadvantages to car leasing transactions.

• Penalties for violations
• Lack of control

The car leasing company will naturally have rules. For example, there is usually a mileage limit. Once that limit is exceeded, a fee is charged. There is also a penalty for early termination or if the car is damaged and the lessee is forced to terminate the contract.

Since the contract is for a lease, the leasing company does not relinquish control of the car. Leased cars are monitored 24/7 via GPS systems which are also used to remind renters of payments or deactivate the car in the event renters are unable to pay.

The schemes are flexible enough to consider even the self-employed with no credit history and the payments also consider the circumstances in which they find themselves. All these people need to provide is proof of stable income.